Ladies and gentlemen, good day and welcome to the Multi Commodity Exchange of India Limited Q1 FY 2024-2025 Earnings Conference Call. Joining us on the call are Mr. Manoj Jain, Chief Operating Officer, MCX; Mr. Chandresh Shah, Chief Financial Officer, MCX; Mr. Praveen D. G., Chief Risk Officer, MCX; and Mr. Rishi Nathany, Chief Business Officer, MCX. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Jain, Chief Operating Officer, MCX. Thank you, and over to you, sir. Thank you, Darwin. Hi, good evening to all of you. Welcome to the earnings and analyst call of Q1 FY 2025 of MCX. I'm happy to state that MCX has concluded this quarter on a highly positive note. MCX consolidated income increased by 27% to INR 253 crores from INR 199 crores over the sequential quarter ended 31, March 2024, while the operating income increased by 29% to INR 234 crores from INR 181 crore in the sequential quarter Q4 of last year. Similarly, we had a great show on the volumes front also. Our average daily turnover, the ADT of commodities futures, increased by a great 48% during this quarter to INR 25,985 crores from INR 17,558 crores in the sequential quarter Q4 of last year. MCX is proud to state that it has consolidated its market share in commodity futures during Q1 FY 2025, and it stands at approximately 98% by the quarter end. On the other hand, the exchange also witnessed a significant increase in the notional ADT of options during this quarter, increasing by almost 29% to INR 147,000 crore from INR 114,000 crore in Q4 sequentially. During Q1 FY 2025, the combined ADT turnover of futures and options together increased by approximately 32%, reaching a combined total of INR 173,000 crore. Comparing to the turnover in the previous quarter, it is up by approximately 32%. Another milestone, MCX clocked its highest single-day turnover of INR 377,000 crore on 15th May 2024. The total traded clients in F&O on the exchange also saw a significant growth. On QoQ basis, 6.4% increase. The current total is around 5.67 lakh as on Q1 ending. Last year, for Q1, the total clients traded were recorded at 3.9 lakhs, almost a 40% increase if you see year-on-year. During April 2024, the exchange issued notification permitting, subject to applicable regulations, FPIs falling under the category of individuals, family offices, and corporate to participate in the eligible commodity derivative contracts and indices. Similar to expansion of product lines, the enhancement of participation in the commodity derivatives market would also help to deepen the market and boost its attractiveness as a venue for risk management for all its stakeholders. To provide wider choice to investors and additional products for risk management to potential hedges, MCX introduced 2 new options contracts in April 2024: Crude Oil Mini Options, which has Crude Oil Mini Futures of 10 barrels as underlying, and Natural Gas Mini Options, which has Natural Gas Mini Futures of 250 BTU as underlying. We hope the new contracts are able to meet the risk management needs of the small stakeholders in India's energy sector, who are particularly vulnerable to the persistent high volatility in energy prices. In May 2024, to its credit, MCX, along with its technology partner TCS, were awarded Best Financial Market Technology Implementation of the Year award at the Asian Banker Financial Technology Innovation Awards 2024 in Hong Kong. The award was in recognition for implementation of an integrated commodity derivatives market platform encompassing trading, risk management, clearing, and settlement end-to-end. Recent changes in regulatory guidelines on commodity derivatives are likely to support MCX's endeavors at achieving expansion and enhanced participation. SEBI has revised the minimum duration of staggered delivery period of commodity derivative contracts to 3 working days from 5 working days. We are hopeful to bring this change in the near future for all our participants. RBI, in its latest bi-annual financial stability report, which was released on 27th June 2024, again highlighted commodity price risk as one of the 5 highest sources of risks out of a total of 25 such risks. This was among the only global risk that continues to remain high from the previous November 2023 report on systemic risk survey, which was undertaken by the central bank. This calls for a dedicated attention and action on risk management by all our stakeholders who are exposed to commodity price risks by actively hedging on commodity derivatives exchanges. In another development, SEBI, via its circular dated July 1, 2024, directed MIIs to redesign the existing charge structure such that it should be uniform and equal for all its members instead of a slab-wise structure which was dependent on volume or activity of the members. The circular will be effective in October 2024, and the exchange would be coming out with further direction in this regard. Coming to the recent union budget presentation, as we all know, there was a sharp reduction in customs duty on gold. This led to a record turnover of INR 71,524 crore in gold, 1 kg options, on that day, 23rd July 2024. This stands testimony for stakeholders' confidence in the exchange's robust mechanism for effective price risk management. With this, I conclude the opening remarks and look forward to discussing more details during the Q&A session. Once again, I thank all the shareholders for their continuous support and faith in the exchange, and we are confident that together we shall continue to enhance our company's value. Thank you, and over to you, Darwin, for initiating the Q&A. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. The first question is from the line of Amit Chandra from HDFC Securities. Please go ahead. Yes, sir. Thanks for the opportunity. So my first question is, you mentioned that we are going with the slab-wise structure is going away in October. So how are we planning to charge the members because the range is in the future from INR 160-INR 280 per crore? So the larger members, if we switch to the blended pricing, then the larger members will have a higher pricing, and it will benefit the smaller ones. So how are we looking at it in terms of the pricing if we are going for a single pricing? And also, in terms of the clearing corporation, also there was a regulation to pass on the benefits of the interest to the members. So what portion of the clearing corporation is from the funds that we have to pass on the benefit to the members? If you can clarify that. Also, based on the SEBI regulations, we're seeing that they're talking about increasing the lot size. So if you can provide some more color in terms of what proportion of the futures volume comes from order sizes, which are, I think, INR 10 lakh, and singles and options, what proportion of the volume comes from order size, which is less than INR 8 lakh-INR 10 lakh. Thank you. Yeah, Amit. Our CBO, Rishi, would be taking up the queries, and we'll support. So I'll hand over to Rishi. Yeah, hi, Amit. Rishi Nathani here. To answer your first part of your question, is that right now, a slab is between 175 and 260, not 160 and 280. SEBI has mandated that it should be true to label and uniform across the board. We are still studying this, and we will come out at the appropriate time with the charge structure. But what we feel is this equitable charge structure will be fair to all market participants. In terms of the revenue for the clearing corporation when passing on the interest, I think that's still under discussion. However, you asked a pertinent question as to what is the percentage of revenue. I would request if Chandrish, our CFO, has those numbers. In case he has them, he will share them with you. Hi, Amit. See, at this moment, we don't have the exact number because the income includes a lot of income accruing from own funds and other funds. So based on what clarification CBI comes out with in the final paper or letter, we'll be able to then compute. Yeah, Amit. Yeah, just to supplement to Chandrish, at this stage, it will be speculative to come out with any numbers and its implications because regulatory contours and directives will vary unless we see the final outcome. It will depend on underlying processes and what really is to be shared or not shared. But yes, I mean, overall, it would be an important area to handle for both exchange and clearing corporation, not only as all exchanges and clearing corporations. And regards to the third part of your question regarding the increasing lot sizes, etc., it's still again under discussion. So we don't have any clarity, so we do not want to speculate on that. As and when things come out, we will definitely let you know because we don't know what is the size which is prescribed and whether it is for futures or for index futures or for individual commodity futures or stock futures. As and when the norms come, we will definitely let the market know. Okay. And so, in terms of the power pipeline, obviously, it has been pending in terms of the monthly series contract and the index options contract launches. So if you can provide some data in terms of what pipelines we are seeing because in the last call, it was mentioned that we are ready with the crude monthly series contract to be launched. So any clarity on that? No. So we have certain approvals in place, and we are in the process of, from time to time, we keep seeking approvals. As and when we get it, we'll definitely issue the circular and let the market know when we are ready to launch which product. Yeah. Again, Amit, just to supplement basically the previous info, so Cotton Candy, we did mention in our last quarter's call also that we are going to amend the contract. So that has been amended, and the new season contract of November has been launched with the new contract specs where one very key change was reducing the trading and delivery unit from 100 to 25 candies. So that has been launched already. I think the Crude and NG mini options, that also, it is widely made known in the media about the launch, and both are successful contracts. Two other contracts in agri which were discussed earlier, Cottonseed Wash Oil Futures and Crude Sunflower Oil Futures. And third was Gold 10 gram, which we have been continuously discussing in the call. So all these three are to be launched, and we reiterate that testing was the reason, system testing why they were delayed slightly. We are hopeful that you will get to know about their launch very soon. Okay. And just one last question from my side. In terms of the costing, obviously, we have given the product license cost separately this time. But in terms of the IT cost that we have reported, so in the last call, you mentioned that the first year of the launch of the platform, there are some charges which are premium charges. And that premium charges will all premium services that you are taking. Those premium services will go away after one year of launch. So if you can quantify out of this around INR 23 crore, which is IT cost, what proportion of that would be premium cost? So, Amit, again, see, last quarter also, it was made clear that we may not be able to disclose such breakups of services. And see, these are not permanent services. Obviously, it was critical for us post-Goola to ensure a strong support to the IT system. So it's not that we don't want these premium services. Yes, as long as those are required, we will definitely continue. Our quantification of such things would be difficult to predict or present here. Okay. Okay, sir. Thank you. Thank you. The next question comes from the line of Devesh Agarwal from IIFL Securities. Please go ahead. Good afternoon, everyone, and thank you for the opportunity. So first question is basically again on that interest income on cash collateral. Although you said it's difficult to quantify at this point in time, could you just help us? What would have been the average cash collateral for the whole of FY2024? Devesh, we'll get back to you on that. The treasury income is something which includes this amount. We'll come back to you with the detailed breakup. For FY2024, you want, right? For FY2024, the margin money, which was in the form of cash with the clearing corporation. Not the income. Okay. Okay. Sure, sir. And secondly, sir, if we see our notes to accounts, on the cost side, you have said that there is a INR 10 crore voluntary SGF contribution that we have made. Any reason why we are making voluntary contribution to SGF? So Devesh, SGF is a critical component in our exchange and clearing ecosystem because it provides strength to the overall risk management process. And the stronger our SGF, definitely, it will give us good cushion and headroom to manage our margins across all our products. So overall, I think that was the underlying idea that as our volumes are growing, our open interest across deliverable commodities is increasing. So definitely, we need to pad up the SGF to handle such contingencies in future because Clearing Corporation is contributing, and overall, MCX last year also, if you have been tracking, there was one-time contributions in two specific quarters. So management decided to pad up the SGF since we feel that it needs to be strengthened looking at our growth statistics. So just to get it clear, sir, there was no regulatory requirement based on that core SGF formula. This is more to do to cushion for your margin requirements in your products. So see, underlying, Devesh, the underlying formula is always there. Those are applied to quantify the mandatory requirements. If there is a mandatory requirement and shortfall, then yes, exchange and CCs would chip in and top it up. However, in this particular instance, even if there is no additional requirement, we'll be cushioning it up on quarterly basis for the timing that is guided. Should we expect, sir, some voluntary contribution going forward on a quarterly basis? Will it be a more regular phenomenon? Yes. As of now, that is the plan. It would be a regular phenomenon. INR 10 crore per quarter is a number to work with, sir? Yes. That's the voluntary contribution as of late. Okay. Sir, you have also provided for this regulatory fees because of that change from premium to notional, INR 4.5 crore in the quarter. Would we be contesting this, or this is the charge that we have taken now? We'll not be contesting this. So Devesh, as of now, I won't be able to give you any concrete answer on the contesting part, but yes, the provisions have been made, and the same was made public also by actual costs and the interest on top of that. Right, sir. And sir, in terms of your new product pipeline, you have series contract and some of the other monthly gold, silver, index options. Any progress that you can share, any timelines by when are we looking to launch these products? So Devesh, just to repeat, we are kind of looking forward to launch some of our existing agri contracts. That is gold 10 gram futures, which will be a monthly cycle. Yes, the two agri contracts on crude sunflower oil Cottonseed Wash Oil. and cotton candy, we have already amended. The other, which is the monthly rolling, those are all future planned products, including the index options. I think that is what you have been asking. No immediate timeline available to provide on the launch of those contracts. And another one was electricity futures, which again has been a topic of continued discussion. We are hopeful to make progress on that. We are actively in touch with the ministry and regulators for progress on that. So that's the current status. Right, sir. Sir, one last question from my side. We've been seeing that within the options segment, the premium ratios have been continuously declining. I think for the month of July, it has come down to almost 1.4%. Could you just give out some reasons as to what is leading to this decline in the premium ratios? Devesh, if you are tracking other exchanges also, I think it is a well-known fact that as volumes creep up in options, the realization rate gradually falls. I think MCX is also witnessing almost a similar phenomenon. I'll request Praveen to supplement this. Yeah, Devesh. So there are many multiple factors, as earlier also I have said. There are multiple factors that will influence your kind of what kind of ratio you get versus the premium to the notional turnover. Generally, the volatility is one factor. But like what Manoj has said, if the volumes are going to be increased, one reason could be like the depth and the volumes is going to be increased in the formats, or it could be in the deep out-of-the-money kind of contracts. So automatically, that can also lead to some kind of reduction in the overall particular ratio. But in general, the volatility and other factors, generally because what is the tendency of the people, whether they will be trading when the contracts are very far to the expiry or very near to the expiry. There are many multiple factors that are what is going to determine your particular ratio. Okay, sir. Okay. Thank you so much. Thank you. The next question is from the line of Sankheth Godha from Avendus Spark. Please go ahead. Yeah. Thank you for the opportunity. Sir, can you give the transaction income breakup into futures and options, which you typically do every quarter? Yeah. Sure, sure. Futures income is INR 71 crores, and options is INR 127 crores. INR 127 crore. Okay. Sir, as you said, in futures, the slab-wise pricing is INR 125-INR 260 per crore. Can you tell the similar number for options? No, no. The average realization? Slabb rate. Slab rate. What you? Slab rate for option is 40-50, like INR 40 per lakh of premium to INR 50 per lakh of premium. It is in that range. Okay. This is per premium? Per lakh of premium. Premium turnover. the lack of premium turnover. Perfect. Perfect. Sir, just wondering if the slab-wise pricing, if you can give an indication because your average realization in futures is around INR 207 per crore, which is somewhere between INR 175-INR 260. So if you want to make it revenue neutral, is it fair to assume that when a single price will be decided, that will be closer to our realization, or it could, from a regulation point of view, it could be even below that number? I know you said that you're still discussing, but if you can give a broader color where it will stop, it will be very useful. Sankheth, the SEBI circular clearly mentions that to begin with, it should be around what is being charged. That speaks for itself. Okay. No, my worry was, sir, that whether it could be at the lower end of the slab rather than being somewhere in the middle. So that's the reason I was. I need to make a comment on that one because right now, as per the circular, it is definitely we have to look at what is the current realization rate. Based on that one, we have to examine internally, and accordingly, we'll take it up with our board, and once it is decided, we'll be announcing it to the market. Perfect, sir. And lastly, just one more thing. Your SGF cost, which is, as you said, INR 10 crore is voluntary. But if you can give me if I do, as a percentage of your transaction cost, it comes to closer to 7%, what you provided for SGF in the current quarter. Just whether this number will grow as a percentage of variable or as INR 10 crore, what you said per quarter, because I believe that open interest will keep on increasing as exchange will grow, which means that your SGF contribution will also grow in line with the open interest, right? And therefore, is it safe to assume that 7% of your transaction income will be the SGF cost every quarter, which is in the current quarter? Yeah. So Sankheth, there is nothing written in stone. The point being that as we envisage the business growth, as Manoj earlier also said, that the volume OI growth, as we envisage that, we want to bolster our SGF and make sure that we don't have to make any ad hoc or sudden contributions to SGF. That is why we are trying to pre-plan and make sure that as business grows, we stay up to speed. Got it. Okay, sir. Fine. And lastly, I think we have last year's numbers with us. The interest income earned on margin money last year, if I'm not wrong, it was somewhere between INR 85-86 crore. So that INR 85-86 crore, probably one will be naturally the upstream money, which was over and above collected by the brokers or members. And second will be the natural margin money. So as per the regulation, what I understand is that the extra upstream money is what you need to return it back. So just wanted to, if you can give the color of that INR 85-86 crore what you made last year, how much was largely because of the upstream money and the regular interest income what you would have earned on margin? So Sankheth, see, that breakup currently we do not have because the money that was invested is including everything, all the surplus that we have. So that breakup cannot be calculated so easily because it varies per day how much the money was invested, whether it was withdrawn next day, which day. So it's a very detailed and lengthy calculation. But just to answer to the question which Devesh had asked, the margin money which was available with CCL on 31st March 2024 was around INR 917 crore. Okay. Okay. This was outstanding figure, right? Not the average. Yes. This was as of 31st March. Okay. Got it, sir. That's it from my side. Thank you very much. Thank you. Thank you. The next question is from the line of Shreyansh Jain from Electrum Capital. Please go ahead. Good evening, sir. Most of my questions have been answered. Can you just provide the ratio of float income and the other income from the remaining income? And are there any plans to increase prices in the options segment? I'll answer your second question first, and then you can give the breakouts. So pricing is something which normally aren't revised frequently. However, as we earlier said, that the current SEBI circular on uniform pricing mandates us to revisit that. And when we revisit it, we will take a studied decision and tell the market what is the pricing going to be. Sir, I will follow up on this. According to SEBI, you have to keep the price somewhere around your current realization. Can you increase the prices in tandem with that, or will it be a separate exercise after that has happened? I mean, as I said, the SEBI circular is very clear that to begin with, the pricing should be around what is being charged, right? I don't think there's much scope for interpretation. Got it. Got it. Yeah. Breakups. Yeah. So So see, that float income is around INR 20 crore for this quarter. Okay. And what was the yield on that? And do you have a ready figure? No, that figure is not available right now. All right. Thank you so much. Thank you. Thank you. The next question is from the line of Chintan Seth from Girik Capital. Please go ahead. Thank you for the opportunity. Am I audible? Yes, yes. Yeah. Thank you. So I was just observing the client members' numbers and which we quarterly publish. If I look at the numbers, we have been seeing the member number count has been declining to 544 now. It has been consistently ticking a little down every quarter. Then authorized person data point also, if you look at a couple of years back, it used to be 50,000. It's now at 35,000. So if you can help us understand what is happening there. And secondly, on the FI, the Cat 2, Cat 3, if you can give us, provide some update on how the traction or what our conversation with them is happening and as they started hedging or trading with the exchange on it. Okay. So thank you, Chintan. The first point being that the number of members of the APs, you are saying they are declining, but that's an industry-wide trend of consolidation. So if you see, as long as our overall participation is increasing, both in terms of clients traded, our overall turnover is increasing. So on all parameters, you are seeing that there is a growth. Now, across the industry, across exchanges, there is a consolidation trend where the smaller brokers, due to various factors, are finding it difficult to continue in many cases. So that is the same situation at MCX also. So in one way, it is leading to more consolidation, more business growth, and we are seeing that as we are progressing, all the parameters are pretty heavy. So that's my answer to your first part of the question. And what was the learning? Second was on the Cat 2, Cat 3. We have around 100 FPIs actively trading, participating on MCX at present, with around 90 Cat 1 and 10 Cat 2 approximate numbers, and quite a lot of interest from FPIs. However, having said that, there are only two commodities in which they are allowed to trade at present, which is crude oil and natural gas, which are contracted. So as and when the list is enhanced, and as and when see, it's early days yet because it's just been a few months since FPIs have actively started trading on MCX. And just as still, when we allowed Cat 2. So we are seeing very healthy traction, and hopefully, as we go ahead, we will see much more participation from all these participants. The customs duty cut on gold, does it have any implication on our drive over volumes here? Is there any impact? No, sir. It's a very neutral impact. Whatever happens, it's just a customs duty cut, right? So it doesn't have much impact on our contracts. Chintan, exchange is a price discovery platform. Correct. Correct. Correct. If your price goes up, down, duty goes up and down, we are transparent, and that's the beauty of the platform, to provide a neutral service to all our hedgers as well as the entire member community. Correct. Okay. Okay. And lastly, on the SGF part, you mentioned that INR 10 crore, you want to make it more linear or more frequent in terms of provisioning rather than an ad hoc, which used to be the case earlier. Are you fixing the quantum of INR 10 crore, or is there a mechanism or a percentage which should one consider going forward? So Chintan, as of now, you may consider this as a number for medium term. Obviously, it's a voluntary contribution, so I would not like to commit that this is a permanent arrangement, as I mentioned earlier. So the management board and both the organization jointly would continuously watch what is in the best interest of both the companies. Lastly, on the cash on books, what is the figure as of June? Anything, any now the CapEx part is largely over, the heavy lifting has been done. If you can throw some light on the utilization of this one. As of June, the available balance for reinvestment is INR 955 crores. Right. As of March, it was INR 848 crore. Right. Anything on the distribution or utilization of the same? Board will take that decision. Anyway, the dividend has been declared for FY2024. Right. Okay. Okay. Okay. I'll join back in. Thank you. Thank you. Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. The next question is from the line of Amarnath from Ministry of Finance of Oman. Please go ahead. Yeah. Hi. Am I audible? Yes, sir. Yes. Just two separate questions. First of all, in this recent quarter, we can see there's an improvement in the futures as well. Previously, where the options was going high, futures was quite muted. But this quarter, we can see the future volumes are also quite high, INR 25,985 crore. What was the reason, or is this the new trend we can see, actually from FY22, continuously it is going down, average 26 then 23, then last year it was average 19. But this quarter, it came up to INR 25,985 crore. What was the reason, and do you think it is going to continue the trend in this way? See, so the point being, Mr. Amarnath, is that we continuously keep reaching out to various market participants, including all the hedging community and the industry. While you saw that initially, like you rightly said, for the last couple of years, you've been seeing a secular trend of growth in options, which took away to a certain extent from futures. However, having said that, the options are based on futures, and in futures also, there is an increased traction because of more participation from the entire participant base, including the industry. And also because there has been quite a lot of interest in various segments like bullion or energy or base metals, we have seen growth in all of them. So it's not that it has been confined to any specific sector per se. It has been a secular all-round growth in futures, which is a very healthy sign as we also see. Hopefully, going forward, we would like this to continue also. End of the day, we are just a platform, and it is up to the market to decide what they want to trade. So nothing happens special on this quarter, right? Because it is why I'm saying because if you look at the trend in the last two, three quarters, it was 19, 21, and then last quarter was 17. And suddenly in this quarter, there was a jump to 25. That's why I'm trying to understand, is this something one-off happened in this particular quarter, or can we take it this is a growing trend now? So there is always a tipping point to everything. So when something happens and then the trend goes down, hopefully, it is early days yet, but hopefully this will be an arrest to the falling trend of futures. But to answer your question, there's nothing specific which comes to mind as to why this has suddenly changed. Of course, the efforts are always on to ensure that there is widespread and all-round participation across product segments as well as across futures and options. Thank you. Can you give some update with respect to your gas exchange kind of part of the business, what's happening there? So Amarnath, gas exchange is not under MCX. Are you referring to IEX exchange and their gas exchange? So MCX doesn't have any partner or associate on natural gas, Amarnath. Oh, okay. Maybe. Okay. And the second part of this, now we are hearing from different calls with respect to this launch of this new product, including that 10 gram, 10 gram Gold as well. The last many quarters we have seen them, every time we are hearing from the management that it will be launched very soon. And I'm hearing the same thing even in this call. Now, just try to understand why are we getting stuck and why it is not getting launched, even after there's so many quarters we're discussing about it? Yeah. Amarnath, we appreciate your concern, and we too are equally concerned in tracking the launch. Last year, as you know, there was a huge event of our Go Live with the new platform. So naturally, there was a delay in new products. And this year, yes, we are really hopeful. I mean, that assurance we can give to you post our Go Live and subsequent technology stabilization. We wanted to thoroughly test all our new products because all these are now on the new platform. So I think in our earlier calls also, we did mention about some of the products, and sequentially, we are progressing in the launch. So I believe now the next one is obviously gold 10 gram, and the two agri contracts which we discussed a little while ago. So we should be announcing their launches very soon. Okay. And the last part of my question, after this BSE and NSE got back the license for this commodity exchange as well, previously, there was a thought that there will be a lot of volumes in the shifted to that side as well. Where do you see the trend? From the market share perspective, I can easily see the market share with the NCX remaining intact. Is that the new approval given to them? Are they able to catch up the volumes from the NCX? So other exchanges were allowed in October 2018 to come into commodities, and it's been almost six years. While we cannot comment about other exchanges, all we can say is MCX has and hopefully will continue to remain the venue of choice for people to trade commodities in India. The other thing, where you are doing so good with respect to metal and gold and other parts where you are always having a high market share, what is stopping us in increasing our market share in the agri commodity part? Why MCX shares is always minuscule in that part of the commodity? You would appreciate that we did not have a very large agri basket, and our flagship contract, crude palm oil contract, was suspended with other contracts and other exchanges. We were left with very few contracts to trade. Agri is a complicated product segment anyways. We have to manage all the stakeholders while trading, and we definitely make every effort to trade. It's not that there is more focus on any one segment or the other. Sometimes some segment does well, and other times other segments do well. Our focus remains entirely on all our product baskets. All your management change, that's all related to this management changing from top management. Is this all done and dusted, or still something to be done? I do not understand what you mean by management change. Say for example, the change in the CFO, change in the CEO, certain other key management personnel changes which have happened in the last few quarters and years. Just trying to understand now the management set which we have at the moment. Is there anything also the key management personnel change is on the cards? There has been no special top management change in MCX. People coming and going is part of a process in every organization, and it is similar for MCX. Having said that, we are awaiting the appointment of our new MD CEO, and as and when that comes, the market will definitely come to know. Thank you. Thank you very much. Thank you. Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue, we request you to please restrict your questions to two per person. You may rejoin the queue for follow-up questions. We have the next question from the line of Sanjay Sathe from Ampersand Capital. Please go ahead. Yeah. Hi. This is Sanjay from Ampersand Capital. So my question is that from all participants, I can sense that there is a huge amount of regulatory uncertainties ahead, and also the company may see some sort of management change fairly soon, and that the company has its plan. But we want to hear a bit of a kind of a summarized session as to how the company will navigate all these regulatory challenges and what all new product and opportunities, etc., are there which will help it sustain the kind of growth that we have seen in recent times. See, as you are seeing regulatory challenges, we live in a highly regulated environment, and any sort of regulation is good because that instills faith in the market participants. If there was not proper regulation, most people would not come and trade on any exchange. So regulation should not be seen as an obstruction. Rather, it should be seen as an enabler to allow the market to function in an orderly manner. And whatever changes there are, and we've seen in over history that people might have said that maybe this regulation or that regulation is tough, but eventually, the markets have grown, and they've grown from strength to strength. So I do not see why there should be headwinds. And secondly, when you're saying management change or anything, I mean, our MD CEO's term of five years ended, and we are awaiting a new MD CEO. So that is, again, I would say a natural process which was not sudden or anything. Everyone knew about it that his term was for five years. It has ended, and once we get a new MD CEO, that will be told to the market. So I would not paint that kind of picture that we are seeing a lot of regulatory uncertainty or management uncertainty. Fantastic answers. My last question is that you mentioned that you're making this provisional 10 or 12 in anticipation of your business growth, whereas earlier you used to kind of react to kind of expansion, and then on the advice of SEBI or something, you used to make those provisions as a requirement after it was raised on you, whereas now you are taking some kind of a preemptive action. And while you are not articulating exact number, but is this something because of the kind of volatility the exchange has seen in the past, some kind of a change in attitude in terms of risk management? And can one see this as some kind of negative for your overall profitability that can happen in the future, or it is more of improving the business quality? See, while short term, you might see it as an impact on the P&L, but please understand this is an enabler. This is an investment into our overall capacity. As you rightly said, that instead of being reactive, we are trying to be proactive. Now, it all depends on the business requirements and the perception. Based on that, the management, the board, and along with our clearing corporation, we discuss this and take a call accordingly. Can I just ask the last question that so while you have shared your thoughts on this possibility of option contract side changes, so how do you really see it? I mean, whether it will affect depending on the market, and should commodity exchange be seen differently from equity market where the fear is of excessive retail usage? Can you just give it from the perspective of how deep the retail participation is in MCX, and accordingly, what kind of discussions are happening to curb excessive speculation? The way you have to look at it is basically why the commodity contracts or commodity derivatives have come into existence. Basic major purpose for commodity derivatives is price risk management. So that is the principal objective of that one. Behind that one, again, you require because while somebody wanted to transfer the risk, you require the other people also to be there. So that is the reason you require a complete ecosystem to be present. But if you look at it, it is not comparable to that of equity market. These are different from each other. And just to add, see, please understand that in equity markets, you have investors, traders, speculators, and issuers. In commodity markets, you have a whole lot of more participants. You have primary producers, whether it's a farmer or the primary manufacturer. You have all the intermediaries. You have importers, exporters, end consumers, intermediate industries who use those products. So you have a whole gamut of physical market participants also. So the commodity markets, in that sense, you cannot do an apples-to-apples comparison of commodity markets with equity markets. So in that sense, we have a much wider participant base as compared to equity markets. Mr. Rand, possibly that will be a major factor which will be considered while implementing the new rules. Thank you, sir. Thank you. Thank you. The next question is from the line of Sathan Kumar from UBS. Please go ahead. Yeah. Hi. Can I order? Yes, please. Yes, sir. First, just a remark, and I appreciate every comment. I would see provision increase in MCX as more of a positive because that implies that you're seeing a lot of growth in the business, right? I should see it as a negative. That means that management is ready to move forward with more and more valuable companies. Is that right? Is that also a way to think about it? See, I'll give you an example. If a manufacturing company does some capacity expansion, what does that signify? That's my point. So I think. There is a disturbance in your line when you're speaking. May I request you to please change your device mode? Yeah. Shut off. One second. Is it better? Yes, please. Yes. Yeah. So yeah, sir, that's what I wanted to understand from you. So I think it's a positive thing. Second thing, there is a INR 10 crore provision which is made to a subsidiary. Can you please clarify that? It's a voluntary contribution to SGF. No, no. Sorry. It's not a subsidiary. It's an associate in GIFT IFSC. You're talking about the investment that the board has approved in India, right? No, there is a INR 100 million provision. I think this was related to the late start of the exchange. SGF contribution. There are two things, right? One is your SGF contribution, which is around and then there is another comment in your P&L, which was around INR 100 million of provision towards which you have made because of, I think, some disruption of the exchange in February. So the provision is made in May. It's INR 10 million, not INR 100 million. So that's some event which had taken place in February in this subsidiary, clearing corporation. Understood. Understood. And yes, sir, the second thing which we're talking about is the investment you have made in the associate. That's your gold spot exchange. That's the approval which we have received from the board, and the investment will be done now. Sir, can you understand what is the opportunity size here? See, already the investment is made in GIFT City in IIBX, and which is we have a 20% stake and which is growing on its own. So IIBX business plan and everything would be there. We are, along with other exchanges and other MIIs, as an investor in that. Sir, what's the height of this right now in terms of the revenue? Last financial year, they were in loss only. So there is no net accretion on the P&L side so far. Our current quarter and Q4 of last financial year, they have shown promising results, and there has been a positive traction. In the current quarter, we have an accretion of INR 2 crore plus into our P&L for this quarter from IIBX. Our share is 20% of that. Our share, which is 20% of that, would be ₹42.7 lakhs. So INR 2.13 CR is the total net for the IIBX. We being 20% shareholder, that's how our share is ₹42 lakh plus. The growth, what kind of growth are you envisaging? I assume pretty high because of the low base. So see, we are not making any comment or forecast or guidance here, but these are market infrastructure institutions and not like a localized or small-time institution. So again, in the past, we have mentioned that they represent our entire economy, and these are like international finance centers. So scope definitely is there, and we would like to look forward to progress in this area. Sure, sir. Last bit, sir, and I'm sorry for asking you to repeat. Can you again just tell us the products which you will be launching in the next 3-6 months? I know you have said that, but just again to summarize. Sure. So there are 2 agri contracts which we are planning to launch in the near future. One is the Cottonseed Wash Oil, and the other is Crude Sunflower Oil. Cotton Candy, already we have launched with the new season that is in November. So obviously, trading would pick up there closer to the new season. Then the fourth one is the Gold 10-gram Monthly Future. So these are immediate deliverables while there are a few more in the pipeline. Electricity, we said it's depending on the regulatory approvals, but we would be keen to launch as soon as we get approvals. Got it, sir. All right. That's it from my side. Thank you so much. Thank you. Ladies and gentlemen, we will now take the last question from the line of Amit Chandra from HDFC Securities. Please go ahead. Thanks for the opportunity again. Sir, I just want your thoughts on how do you see index options as a category in terms of the contribution going ahead? Because if you see the other exchanges, index is a very, very large category. In fact, almost all the volumes happen on index. And in MCX, despite having index, it is not seeing any traction. So not for the short-term point of view, but just your thoughts on whether index can become a big category and how the regulator sees index as a category, especially commodities. Amit, see, options right now, you know that we are ready to launch the index options. However, the regulatory guidelines have already come out in place, like one commodity exchange can come out with index options. So today, the product that we have is index futures. That one, Bulldex futures is the most active index futures. Coming to the prospects, I won't be able to give you any number to it, and it is clearly not comparable to that of equity options. But actually, what all we can be able to see is that one because it is going to give another avenue. At the same time, it is expected to be a very good product from our side. Why I'm asking this is because by any reason, options, we are seeing good volumes in crude and natural gas as a cash-settled contract. But in gold, the bottleneck is the underlying in terms of physical delivery. So that can be offset by having a cash-settled bullion index options contract. So is it a right way to take and your views on that? If it comes, then the gold can pick up in index. Yeah. Like I said, it is like if you look at it, it is like design-wise, it is a very good product, but it is like it also has certain limitations because we cannot have more than multiple commodities cannot be made part of a single index. So that kind of challenges are there. But of course, it does have some advantages like it can be a cash settled contract, and it can be like bullion, otherwise, or a delivery-based contract. So it definitely has certain kind of advantages. But definitely, we'll see that because since the regulation is already in place, definitely, we'll look into that. But But I think as and when our systems are tested, we'll be going ahead with regulatory after educating the regulatory officers. Okay. So thank you and all the best. Thank you. Thank you. Thank you. I would now like to hand the conference over to Mr. Manoj Jain, Chief Operating Officer at MCX, for closing comments. Over to you, sir. Thank you, Darwin. Thank you all for joining the analyst call. We really appreciate your participation and continued support. We reiterate that MCX is committed to provide a transparent and efficient platform for all our stakeholders, and we look forward to your continued support and faith in us. Thank you. Thank you. On behalf of Multi Commodity Exchange of India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.